Final answer:
The adjusting entry for inventory discrepancy under a perpetual inventory system when the Merchandise Inventory account balance is $60,000 but the physical count is $35,000 is a $25,000 credit to Merchandise Inventory.
Step-by-step explanation:
The correct answer to the question regarding the appropriate adjusting entry for inventory is: a $25,000 credit to Merchandise Inventory. A physical inventory count has revealed that the actual merchandise inventory balance is $35,000, whereas the account balance in the books was $60,000. To adjust the account balance to match the physical count, you would need to decrease the Merchandise Inventory by $25,000, which is the discrepancy amount calculated (book balance $60,000 - physical count $35,000). Therefore, the adjusting journal entry would be a debit to Cost of Goods Sold for $25,000 and a credit to Merchandise Inventory for the same amount, which correctly reflects the shrinkage or inventory loss of $25,000.